Hong Kong is a globally accepted region for setting up a business, and we all know that the statistical ranking shows that it is a dream place for investors. Setting up a business in an exceptional place is always the priority of business people. It is great to have a ranked business region to set up your businesses but finding a good business place is not enough; further information about the marketing research and business scope also matters.
Suppose that you entered the Hong Kong market, but you are blank and don’t know anything about the business entities there. So it would be challenging for a newcomer to adjust there and run up businesses as it requires proper knowledge about the Hong Kong stock exchange market.
So to found a great business place is not enough, but the proper knowledge about marketing research and trends is all that matters.
This article will find out the types of business entities and select accordingly. The most common type of business entity is a private company limited liability. The advantages and disadvantages of selecting one will also help you choose one according to your requirements.
Undoubtedly, Hong Kong is an exceptional place to run a business. To set up a business in place also requires knowledge about the market’s competition. As there are several types of business entities, the pros and cons of those companies can help you get the effective one.
Before incorporating a company in Hong Kong by registering with companies’ registry, you must ask yourself your target market, the liability of your business, its scope purposes, and status in marketing research. Knowing these answers can help you choose the right business entity according to your business type.
In Hong Kong, business entities are mainly described as private and public company, but it further includes;
The most common business entity registered in Hong Kong is limited liability companies. Limited companies have a separate legal entity, strong and autonomous structure. Its structure is endurable and easier than other types of business entities in Hong Kong. This type is comprised of three further types;
It is the most common and best type for small to medium-sized businesses in Hong Kong. It is a limited and personally liable company with its separate legal entity. This feature applies to both mainland China and Hong Kong. However, some rules are to follow while incorporating this company by companies’ registry.
There can be one or multiple company secretaries; the sole director cannot be the company secretary.
The main advantages of incorporating a private company are;
This type is not limited to constricted shareholders. It allows more than 50 shareholders that private limited company. This company can be incorporated in Hong Kong by a company’s registry, responsible for registering local companies and companies incorporated outside. Or it is easy to incorporate the company by registration with the business registration office. Only a business registration office can make it quick and easy for you.
The main advantages of a private limited company are;
A public company limited by shares is a locally incorporated company in which the number of shareholders can be more than 50. A public company is one where shares and opportunities are offered to the public.
in this type, the company is owned by only one person. The loss and profit are liable to only one person. It is the basic level to enter the Hong Kong stock exchange market.
Under the Hong Kong companies ordinance, a partnership is developed when one collaborates with another person to do business, having a shared intention for profits. There should be an agreement between the partners.
Another type is a limited partnership which is constricted to only two participants
According to the partnership ordinance in Hong Kong, all the partners should have a mutual argument.
Foreign companies register an office to raise capital and extension of the business. The purpose is to generate profits via commercials. It does not have its legal entity and system, but it is responsible to the parent company.
Is there LLC in Hong Kong?
It is necessary to have at least one shareholder, a director, and a secretary if one wishes to open an LLC in Hong Kong. In this type of company, there is no residency requirement for shareholders, and the maximum number of shareholders is 50.
Is a Hong Kong limited company a corporation?
In Hong Kong, a limited liability company has its legal identity separate from its members. A limited liability company can be a good choice for a small business, a medium-sized business, or a large corporation, depending on its type.
Do you want to set up a new company in Hong Kong but not decide on the business entity? Well, not to worry about it. Hopefully, the abovementioned entity description and its pros and cons can help you select the business entity type according to your interests.